First, a little background: Zenith RMM is now a standalone company that offers remote monitoring software and NOC (network operations center) services to nearly 3,000 MSPs that manage almost 400,000 customer endpoints. Zenith Infotech and Summit Partners have both invested in Zenith RMM.

Now, my questions and the responses from Saraf, George and Glass.

1. MSPmentor: What was the spin-off process? Did Zenith Infotech put the RMM business up for sale and did other companies bid for the business?

Answer: Saraf indicated that Zenith Infotech has been considering some strategic RMM options for the past year or so. But serious talks with Summit Partners started around four months or so. Saraf didn’t discuss whether other companies had bid on the RMM business. Saraf noted that Zenith Infotech maintains a strategic stake in Zenith RMM, though he confirmed it’s a minority stake.

Answer: Said Glass, “From a market perspective, the remote monitoring capabilities are critical for the evolution of MSPs from old-school break-fix to a true partner to SMB customers like doctors offices, real estate offices, and more. But there’s not a lot of penetration today; we think there’s a lot of growth left. Both on the software side and the [NOC] services side. We met Akash and saw the opportunity clearly.”

Glass added, “We invest only in growing, market leading companies. Zenith RMM fit that bill. But there’s a lot of opportunity around the RMM market; if we can find other opportunities we will investigate them. But we won’t invest in anything that competes with our current investments.”

3. MSPmentor: Will there continue to be synergies between the Zenith Infotech (cloud services) and Zenith RMM companies?

Answer: Saraf said, “Absolutely. Our partners see that continuing to happen. Our partners will not see any inconvenience [by the RMM spin-out].”

4. MSPmentor: Does Summit Partners see Zenith RMM as a short-term investment that can be sold off to another company, or a long-term holding?

Answer: George said, “It’s true the last few companies I’ve been CEO of have been acquired but that’s not because we were looking to sell. We had long-term plans but the companies were acquired because they were strategically important to the buyers. The future of Zenith RMM is in front of us. I think we’re in the early stages of our opportunities. We don’t have any intentions of selling anytime soon at all. We want to make our MSPs the most profitable MSPs in the industry.”

George didn’t say how many employees Zenith RMM will have, but he indicated that Zenith RMM is investing in its technical team.

5. MSPmentor: What steps will Zenith RMM take to protect its installed base as some rival RMM providers potentially spread fear, uncertainty and doubt about the Zenith RMM spin-out?

Answer: George said, “It is a competitive market, no question about that. But frankly I think we’re right in anticipating the marketplace will not read the news as negative. This is a positive event. We’re reassuring our position in the marketplace. You’ve got a real investment happening and a seasoned management team. Can [rival RMM providers] go and convert our MSPs? I think they’ll find great difficulty. We have an integrated platform — software coupled with the NOC operation to provide an end-to-end solution. It will be very difficult for someone to [displace] the software and the NOC operation. The more successful an MSP becomes, the more inclined they are to join us with the NOC operation.”

Clarity and Competition

For MSPs I see two clear takeaways: Zenith partners now have clarity about the state of Zenith RMM — who owns it and why. MSPs also benefit from continued competition in the RMM market, where software rivalries are pretty darn intense.

6 comments

Joe – lot’s of focus here on Zenith RMM but I would love to know more about where this leaves Zenith Infotech itself. It’s been clear for some time among the partners I’ve spoken to that Zenith seemed to have taken their focus off the RMM product so I suspect that the comments above are right, and this is a positive move for the RMM and NOC partners. But I haven’t found many people with very much positive to say about the new Mirror Cloud and SSO products which are now in divorced from the RMM and NOC – I’m one of many people I know trying to simply send them back and forget it ever happened – I would be interested in knowing what this change means for what remains of Zenith Infotech and its new and seemingly troublesome product line
Thanks
Lee

Thanks for your note. Some thoughts: I don’t have direct experience running Zenith’s cloud solutions. I heard about some early problems (2009/2010) but thought this was the year those cloud solutions were hitting their stride. I’m reaching out to both Zenith Infotech and the Zenith community for more perspectives.

In particular, I’ve pinged Zenith Infotech CEO Akash Saraf for his views on the Zenith Infotech strategy going forward. If I gather any insights I’ll be sure to post a follow-up blog.

Lee, I appreciate your knowledge and concerns springing from the contacts and experience with both RMM and Cloud…but my experience and logic tells me that an entreprenuer would sell a part/whole of the business which he doesnt think can add/create significant value on his own or see downside for the business…he will never sell or rather retain that part of the business where he see great value creation…unless he is financially stressed and needs money…in which case he’ll have no option but to sell better part of his business as there will not be many buyers for inferior one…in case of Zenith Infotech, with little knowledge that i have, i am more inclined to believe its rather former than the latter case…there could some problems in Mirror Cloud/SOS but if there is will and capability to correct them and come up with a stronger business model (which the company has amply demonstrated) then i think there is every reason to believe that with focus on Cloud alone they will do very well..
Thanks
Nads

Hi Nads,
I don’t disagree with your perspective – I’d just like to get some feel for the official line on the Infotech side of the business. Most of the press seems to be around Zenith RMM.
You could well be right – and in fairness, just about everyone I know who has had problems with the cloud products has done so with utter disappointment – the idea that it’s a great ‘theory’ seems to persist. Zenith Infotech practically created an industry with their BDR all those years ago and you could be right this could signal a renewed concentration on hitting the mark with the new line up.

Joe – the LinkedIn Zenith Advisory group would be a good place to start to get an idea of the continuing issues.

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